China-West ties are increasingly eroding, and this could have significant consequences for the role of Hong Kong as a global financial center.
The latest blow to the city’s standing came on Tuesday, when US President Donald Trump pursued a threat to revoke the special relationship between the the two countries, which in the past, among other privileges, has exempted the city from certain tariffs.
“Hong Kong should now be handled. In the same manner as continental China”. Trump said in a White House statement.
Hong Kong is China now?
The Trump administration first indicated that it would change its opinion of the Asian state a few weeks ago. When China started planning to enforce a new law on the city on national security. Law opponents argue it violates the civil and legal rights that existed since the former colony was turned over to China in 1997 by Britain.
After the legislation came into force on July 1, questions regarding the state have only been rising among foreign corporations and political leaders. Few tech companies have stepped back from the market while businesses have voiced concern about the broad scope and uncertainty of the new legislation. The New York Times also announced on Tuesday that it would transfer hundreds of its Hong Kong-based employees to Seoul. As it started “making contingency arrangements.”
In addition to Tuesday’s decision to end the special trading relationship. Trump also signed a separate piece of legislation that would impose sanctions on businesses and individuals. It considered to help China restrict the autonomy of Hong Kong.
“There won’t be significant gaps. Between Hong Kong and other major Chinese cities. Like Beijing and Shanghai without its benefit as a special economy under U.S. Rule,” said Simon Lee, senior lecturer in international business at Hong Kong University of China. “International firms should be talking. About how they continue to retain their current operational size in Hong Kong.”